Integrated 2021 Report

Integrated2021Report

NEC Integrated Report 2021		01

NEC creates the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential.

NEC Way	Purpose
	Our Stance as a Company
	NEC creates the social values of safety, security, fairness and efficiency to
	promote a more sustainable world where everyone has the chance to reach
	their full potential.
	Principles
	The Founding Spirit of "Better Products, Better Services," Uncompromising
	Integrity and Respect for Human Rights, and Relentless Pursuit of Innovation

By putting the NEC Way into practice, we will create social value.

Since its founding, NEC has worked to provide social value by putting forth its own unique approach to each era.

We will pursue innovation and work to realize NEC's Purpose, with the goal of living harmoniously with the earth and creating mutual understanding between people,

no matter the era, no matter the conditions.

The NEC Way is a common set of

values that form the basis for how the

entire NEC Group conducts itself.

Our Stance as Good Businesspeople

Code of Values

Code of Conduct

02	NEC Integrated Report 2021		03

NEC 2030VISION	Life
Global warming, the destruction of the environ-
ment, food and water shortages, energy issues,
­economic disparities-these are some of the many
global issues that stand in the way of realizing our
vision of society. To realize our Purpose in a time of
rapid social change, we have put together NEC
2030VISION as a compass to indicate the business
direction and path for NEC to follow.

Bringing people together and filling

each day with inspiration

Fostering mental and physical well-being and long life

Improvement of lifestyle

Free and open learning opportunities

Nurturing prosperous cities with inclusive

and harmonious societies

Creating sustainable societies

by shaping new industries and workstyles

Society

Environment

Society

Sharing hopes that transcend time, space,

and generational boundaries

Democratization of data use	Social stability through data democratization	Free and equal communication services
Cities without traffic congestion and accidents	Government services from the consumer's perspective	Safe and secure cyberspace
	Closing the gap in employment opportunities

Changing Consumer Needs

Consumer needs can be categorized into three layers. At the base is "Environment," which forms the foundation of life for all people and organisms on earth. Above that is "Society," the basis on which cities, work, and communication are supported. The highest layer is "Life," which ­supports and improves the comfort and lifestyles of consumers in their daily lives. These three layers are our starting points for value creation.

Environment

Living harmoniously with the earth

to secure the future

Realization of a decarbonized society

Implementation of global warming countermeasures

Guaranteeing food and water security

04

	Editorial Policy
	NEC has published annual reports containing both financial and
	non-financial information since 2013. Starting in 2018, having defined
	its materiality, NEC has changed the name of its annual report to the
	"Integrated Report."
	Integrated Report 2021 comprises initiatives for achieving the NEC
	2030VISION and the Mid-term Management Plan 2025, which are
	based on NEC's "Purpose." NEC has also compiled a section on
	extremely high-profile human resources, focusing on the appeal of
NEC Initiatives for Contributing to the Achievement of the SDGs	said human resources as well as NEC's culture.
The Message from the President explains the philosophy behind the
In 2005, NEC became a signatory to the United Nations Global Compact, a global initiative aimed at sustainable growth for society	NEC Way and the NEC 2030VISION, and the Mid-term Management
and companies. We are now promoting corporate activities based on the Ten Principles of the UN Global Compact pertaining to	Plan 2025 explains the strategic and cultural aspects. Furthermore,
the four fields of human rights, labor, the environment, and anti-corruption, which align with "uncompromising integrity and	this report focuses on people, who are the driving force behind man-
respect for human rights," one of the Principles of the NEC Way. Moreover, each and every member of the NEC Group, from officers to	agement implementation of NEC's "Purpose," and features roundtable
discussions with young researchers and messages from our employ-
employees, performs their day-to-day activities based on the NEC Group Code of Conduct.	ees who are at the forefront of creating value. The report also sum-
Furthermore, based on the Ten Principles of the UN Global Compact, the SDGs pledge that "no one will be left behind" is aligned	marizes the management that supports the creation of corporate
with the NEC Purpose, to "promote a more sustainable world where everyone has the chance to reach their full potential."	value, focusing on "materiality"-management priority themes from
Information and communications technology (ICT) has the potential for responding to a variety of issues. Therefore, we believe	an ESG perspective.
that we can contribute significantly to all of the targets set out in the SDGs by drawing on our leading-edge technologies in such	NEC will keep endeavoring to provide increasingly transparent and
fields as AI (biometrics, etc.) and 5G, as well as our competence in R&D and implementation as we engage in dialogue and co-	continuous information while incorporating feedback from various
stakeholders.
creation with a range of stakeholders.

NEC Integrated Report 2021

05

Contents

Cover Story

NEC's Past, Present, and Future

1. Message from the President

1. NEC's Value Creation Journey

1. What is NEC

NEC's Business Model

18	Value Creation Process
20	Review of the Mid-term Management
22	Plan 2020
Mid-term Management Plan 2025
30	CFO Message
34	R&D and Business Development
	38	Roundtable: Creating Social Value
40		through NEC's R&D
NEC, for Those Who Seek Challenge
	43	CHRO Message
46	44	Messages from Employees
Living Harmoniously with the Earth

NEC 2030VISION and Areas of Contribution (Fiscal 2022 and Onward)

We believe that by working to fulfill the NEC 2030VISION, we can contribute to the achievement of the following SDGs in particular. We take hints from the SDGs to point out the issues and challenges facing society and use the SDGs as a guide when setting targets for creating social value-which we aim to do through our business-and also for managing progress.

Reporting Period

April 1, 2020 to March 31, 2021 (hereinafter referred to as "fiscal 2021"; all other fiscal years are referred to similarly). This report also includes information obtained after this reporting period.

Scope of Report

NEC Corporation and its consolidated subsidiaries

50	to Secure the Future
At a Glance
52	Business Overview

Management That Supports ­Corporate Value Creation

No Poverty

Zero Hunger

Health

Education

Gender Equality

Water and

Energy

Employment

Infrastructure

No Inequality

Cities

Consumption

Climate Action

Oceans

Land

Peace and

Partnerships

Sanitation

and Production

Justice

Living harmoniously	●	●		●	●	●		●	●		●
with the earth to
secure the future
Nurturing prosper-
ous cities with						●		●	●		●
inclusive and
harmonious
societies
Creating sustainable					●	●	●	●		●	●
societies by shaping
new industries and
workstyles
Sharing hopes that
transcend time,					●	●	●		●		●
space, and
generational
boundaries
Bringing people		●	●			●				●	●
together and filling
each day with
inspiration

Reference Guidelines

• ISO 26000

• GRI Standards

• United Nations Global Compact

• International Integrated Reporting Council's "International Integrated Reporting Framework"

• Japan's Ministry of Economy, Trade and Industry's "Guidance for Collaborative Value Creation"

NEC is a signatory to the United

Nations Global Compact.

Other Related Information

• Earnings Releases/Annual Securities Report

• Corporate Governance Report

• Sustainability Report

• Information Security Report

1. Risks and Opportunities

1. Respecting Human Rights

1. Supply Chain Sustainability

1. Corporate Governance
   69 Messages from Outside Directors

1. Directors and Audit & Supervisory Board Members

1. Cross-CompanyCorporate Strategy Promotion Framework

Corporate Data

1. Financial and Non-Financial Highlights

1. Corporate Overview

06	NEC Integrated Report 2021		07

NEC's Past, Present, and Future

Message from the President

Takayuki Morita

President and CEO (Representative Director)

April	1983	Joined NEC Corporation
April	2002	General Manager, Business Development Division
April	2006	Senior Vice President, Executive General Manager,
April	2008	Corporate Business Development Unit
Senior Vice President
July	2011	Executive Vice President
April	2016	Executive Vice President, CGO (Chief Global Officer)
June	2016	Executive Vice President, CGO and Member of the Board
April	2018	Senior Executive Vice President and Member of the Board
June	2018	(Representative Director)
Senior Executive Vice President, CFO (Chief Financial Officer)
April	2021	and Member of the Board (Representative Director)
President and CEO (Representative Director) (to present)

We will create new social value promoting digital transformation, thinking about the future of both society and our customers, with Purpose-driven Management at the foundation.

The spread of COVID-19 continues to have a massive impact on the world today. It has brought about many important changes to our lives, sometimes leading to benefits, other times exposing problems. While some of these changes were forward-facing, such as the acceleration of digitalization and the expansion of workstyle reforms and cashless payments, the pandemic also shone a light on the sluggish efforts to digitalize Japanese society as well as the issue of the digital divide, making it a strong reminder of the impact of technology.

The pandemic, in a rather unplanned fashion, sped up the changes that would ring in the next generation of society, and after getting a glimpse into our ideal trajectory, I expect that there will be great strides taken toward the digitalization of society in the future. This experience has taught us that, if digitalization is to go forward, we cannot just transform our technology. We must also transform institutional and social systems, and we must transform our minds in a way that will accept these changes. For people's minds to change, this transformation needs to take place without leaving the vulnerable behind; there needs to be an effort to build public trust toward digitalization and a willingness among every person, ourselves included, to adapt.

Our lives along with the future of the country will change drastically depending on our efforts to digitalize. As a social value innovator, NEC will continue to call on its R&D and highly trusted social implementation technology to serve as a base for promoting digital transformation across society, and to create new social value as part of ensuring a better future for society and our customers.